Glass half full for Aussie biofuel

Australia has the opportunity to join the US in becoming an ­aviation biofuels leader in the ­Pacific Rim as well as learn how to succes­sfully run programs.

That’s the view of Commercial Aviation Alternative Fuels Initiative executive director emeritus Richard Altman, who says the US experience is that participation of states is fundamental.

“I think what we’ve learned now is that execution of the program, while you require a federal government framework, is really done at state local level,’’ Mr Altman said during a visit to Sydney to speak at a conference yesterday organised by local biofuels expert Susan Pond and the University of Sydney’s US Studies Centre.

Mr Altman sees many similarities between the federal systems here and in the US and notes some states — such as Queensland and South Carolina — have sister state relationships. But he warns there is no single formula. “It depends on what crops are available and what can be grown because the feedstock is the most important element,’’ he said. “In some states which are urban — it’s garbage — it’s not even a crop per se.’’

The biofuel expert outlined four cases from US states in which he said CAAFI had managed to put together a biofuels “match.com’’ by drawing together leaders and interested parties.

He said a requirement was that there were feedstock producers and end users such the US Defence Department or airlines.

“Effectively, what we’ve been doing is setting up first dates — and second dates hopefully — using Agriculture Department funds to actually examine the feasibility of certain developments,” he said. “And each one of the states has a different set of ­lessons that we’ve learned. Probably the primary ones are that first of all you accept that there is no global solution that you have to work in various locations. ‘’

Surprisingly, Mr Altman says biofuels have done reasonably well in an environment where oil prices are dropping providing they address sustainability issues other than just the economics of the fuel itself.

A project in the dairy state of Vermont, for example, is looking at using to cow manure to produce algae that can be used to produce fuel. The project also produces granular fertiliser that can replace the cow manure, which has posed problems with run-off that promotes algal blooms in important local tourism drawcard Lake Champlain.

The use of the granular fertiliser reduces the damaging run-off and avoids some of the clean-up costs involved with manure spreading adding to the viability of the biofuels process and making the economics more favourable.

In Connecticut, the biofuel industry is helping repair the business model of a facility built in the 1980s to convert municipal rubbish to electricity. The facility gathers more than 500,000 tonnes of rubbish from Harford and surrounding towns but had hit problems because the price of electricity was only a fifth of what it had been projected to be when the plant was set up.

“Now under the feasibility study we did there with USDFA money it turns out you generate six times as much revenue to produce jet fuel, diesel which is also part of the stream of one of these units. “So you’re looking at really a business case that stands on its own at fuel prices as they were last summer before the dip, $3 a gallon fuel. “The business case stands up, there’s a double-digit return to the producer and a revenue stream for the city that they would not have gotten along with the towns who are stakeholders.’’

In South Carolina, the question centred on jobs. It is a wood production state and can support open pond algae production in the south. “The key driver for the state has been jobs on the I-95 (interstate highway) corridor to the ­degree that we bring in fuel companies and build relationships between the fuel companies and the local wood providers,’’ Mr Altman said, who noted the proximity of big military base was also a plus.

Florida lost about 60 per cent of its famous orange production to an insect infestation that saw the of its five juice producers move out.

CAAFI was tasked with finding an energy crop to replace the orange crops and a project expected to start in coming months aims to build a supply chain for a new biofuels sugar-based alcohol to jet fuel process due to be certified this year. The process will also address another algal bloom problem caused by sludge from septic tanks that can be used to fertilise the ­energy crops. That same process was the subject of a recent announcement between chemical company Gevo and Alaska Airlines.

“The message is there are lots of pathways, lots of things work, they’re all different,’’ Mr Atman said. “But if you can build from the bottom up from the state and make sure everybody’s engaged in the supply chain, it can work. It works in the states, it can work here because you do have a federal system.”

Mr Altman said the biofuel industry had been supported in the US by Secretary of Agriculture Tom Vilsack, who had been committed to making it work to generate rural jobs.

“It’s really, truly a sustainability issue,’’ he said “ It’s got an environmental element, it’s got a jobs element. Almost everywhere we go there’s an interaction with some environmental problem, which may not necessarily by related to CO2 production. ‘’

A breakthrough in US has also come in 2013 when the “Farm to Fly 2.0" agreement was signed with CAAFI the secretaries of agriculture and transportation and the US Federal Aviation Administration. The Energy Secretary has now signed up to the plan build towards a billion US gallons of aviation fuel a year some time after 2018. Mr Altman said the US had done the spade work and CAAFI saw Australia as having the best chance to emulate what had been done there.

Australia had strong state ­governments and must get over the belief it was too small to be world leader.

“Australian states are no smaller and in many cases they’re larger economic institutions than US states," he said “You can’t look at the state of Vermont and any state in Australia and suggest that you’re not bigger.

“So size is not an issue. It’s question of having a local champion, someone who’s willing to take it on. The question is who are your local champions?’’

But Mr Altman admitted it was useful to have federal framework that supported biofuels. While this had diminished in Australia in recent times, it was still there.

The work in the US also meant the risk of starting a biofuel project had diminished because they were no longer first of their kind.

“What you can be, and the way it can be framed, is that you’re the entry point into the Pacific Rim countries because here it’s easier to do than anywhere else where you have significant cultural ­differences and you may not have feedstock,’’ he said.

Mr Altman urged Australia to be “a co-leader rather than just a follower of US efforts’’ and warned Australia’s dependency on overseas oil could become an issue, particularly given the unstable geopolitical situation.

“The jet proportion of the ­Australian transportation fuel is significantly larger on a transportation basis than it is in the US,’’ he said. “Also Australia is an island and very far away from anywhere else.’’

Rich Altman currently serves as Executive Director Emeritus of the Commercial Aviation Alternative Fuels Initiative (CAAFI). Altman co-founded CAAFI in 2006 with Airline, Manufacturer, Airport and FAA Sponsors. He served CAAFI as Executive Director from its formation through to November 2012.